In the latest trading session, ServiceNow (NOW) closed at $153.38, marking a -80.4% move from the previous day. The stock's change was less than the S&P 500's daily gain of 0.79%. Elsewhere, the Dow gained 0.14%, while the tech-heavy Nasdaq added 1.38%.
The maker of software that automates companies' technology operations's stock has dropped by 4.17% in the past month, falling short of the Computer and Technology sector's loss of 0.85% and the S&P 500's gain of 0.87%.
The investment community will be closely monitoring the performance of ServiceNow in its forthcoming earnings report. It is anticipated that the company will report an EPS of $4.35, marking a 18.53% rise compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.52 billion, up 19.19% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $17.31 per share and revenue of $13.23 billion. These totals would mark changes of +24.35% and +20.49%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for ServiceNow. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. ServiceNow currently has a Zacks Rank of #3 (Hold).
Digging into valuation, ServiceNow currently has a Forward P/E ratio of 45.21. This expresses a premium compared to the average Forward P/E of 15.91 of its industry.
Also, we should mention that NOW has a PEG ratio of 1.85. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computers - IT Services industry had an average PEG ratio of 1.85 as trading concluded yesterday.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 87, which puts it in the top 36% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
